Love them or loathe them, lead providers look set to stay, as brokers and IFAs continue to recognise the benefits of third-party leads. However, the current positive adviser mood has not always been the case and lead generation companies have had to work hard to change the perception of their industry. But are things really any different? How do lead generation propositions of the present differ from those of the past, and what does the future hold for this marketing phenomenon?
The history of leads
The idea of lead production is not new – indeed it is likely that the very first lead was produced seconds after the very first business was launched. However, it was not until the early ‘noughties’ that lead generation firms specialising in the capture and distribution of clients over the telephone or via the internet started to spring up – over 20 years after the creation of the World Wide Web. This delay was partly due to the internet being little understood in its formative years, but part of the blame must lie with available opportunities going unrecognised – purely because intermediary businesses preferred to conduct their marketing through the tried and tested means of print advertising, word of mouth or direct telephone sales.
The catalyst which saw third-party lead generation launched to centre-stage was ‘Mortgage Day’ – arguably the most influential day the mortgage industry has seen. Advisers were, for the first time, required to look at other business generation options following the amendments to rules governing ‘cold-calling’. The industry quickly became saturated, with a range of new lead providers seeing the sales opportunities. Each of these companies had the same aim – to quench intermediaries’ thirst for leads, and make money in the process. While there were reputable firms which had long been campaigning for intermediaries to protect themselves and their pockets by asking seven ‘killer questions’, the speed at which the industry grew meant it was easy for somewhat less than reputable firms to operate. Such organisations – who charged up-front for leads that did not materialise, did not highlight where leads originated or how they were compliant, had refund policies likened to ‘stealth tax’, or who simply produced leads that could not convert – brought the industry into disrepute, creating massive distrust among the mortgage intermediaries they had claimed to be helping.
The good news is the negativity these less-than-reputable firms created caused the nation’s premier lead providers to redress the balance by enhancing their propositions to further consider, protect and, dare I say it, champion the rights and needs of their intermediary customers through greater choice, transparency and improved education. This statement may sound too good to be true – so exactly how do intermediaries benefit from these enhancements?
Lead benefits
The word ‘bespoke’ can now be used with much more emphasis in the lead generation industry. In addition to having greater control over the geographical locations from which leads are produced, and both the volume and frequency of leads provided, intermediaries have access to a greater variety of lead types. Gone are the days when mortgage leads were the only ones available, with some firms now venturing into IFA-friendly areas such as savings and investments. Such companies have also further refined mortgage leads into specific sub-categories such as ‘remortgage only’ or ‘right-to-buy’, to ensure mortgage specialists can work with the lead type they need and that suits their preferred market.
Further choice is available in lead pricing, with both fixed price propositions and ‘ebay style’ bidding platforms on the market.
Reputable lead providers have always given an element of transparency in information given relating to the origin of leads, before any contract is signed by a prospective intermediary customer. However, we are now welcoming new frontiers of transparency. Intermediaries can investigate the specific source of every lead and pick and choose who they wish to purchase leads from, based on an evaluation of the prospective quality and return on investment – although this level of information is not offered by every provider.
It has long been said internet leads are unique and require specific management if they are to produce good conversion rates, but there are very few lead generation firms offering the necessary training and assistance to ensure intermediaries can maximise the potential of every lead. One overriding element that has aided the business is the longevity of some of the key players, and it is a good sign that we are no longer viewed as the ‘new kids on the block’. Brokers were perhaps initially right to be sceptical of this new service. However, those who embraced the new service and took a calculated risk at the beginning have certainly maximised their revenue, and lead providers have firmly established their place in the market.
The future
Looking to the future, intermediaries will have more power and control over their accounts with third party lead generation firms than ever before – something that is clearly working as demands for the lead industry to be regulated have significantly reduced – but where do we go from here?
The head of one of the UK’s top lead suppliers has publicly claimed the industry is likely to implode unless we succumb to the merger attitude adopted by other areas of financial services. I disagree. I whole-heartedly believe the leads industry will thrive and progress by furthering the use of technology.
So what impact can technological advances have on the leads industry? It does not take a genius to realise that flexibility, choice and transparency are the way forward. So I predict the lead providers offering a diverse range of lead types the intermediary can specifically choose between will be onto a winner. Similarly, a company that can do this in the shortest time scale and most conveniently for the purchaser will flourish. A provider that looks at a way of trading customers and allows the seller to gain incremental revenue from a source he had not previously accessed will add value all round. As the saying goes, ‘one man’s meat is another man’s poison’ – just because you do, or don’t trade in adverse mortgages, doesn’t mean the lead doesn’t have value to someone else. The challenge is how and when the lead is transferred to another adviser.
I firmly believe third-party lead firms are here to stay, and any relationship an adviser has with generators should be considered a long-term and profitable partnership. Rather than being the Rottweiler that could bite you on the proverbial behind, the leads industry has evolved into something resembling a Golden Retriever – dependable, trustworthy and reliable – and we all know that a dog is for life.
